FM Sitharaman abruptly ended GST meet when states made 3 demands: P Chidambaram : 14-10-2020

New Delhi: Congress leader P Chidambaram has said that finance minister Nirmala Sitharaman “abruptly ended the GST council meeting, rose and walked away” when some states raised three demands to end the stalemate over the Centre’s proposal to borrow.

Addressing AICC’s virtual news conference on Tuesday, a day after the GST council meeting failed to reach a consensus, the former finance minister said that the three demands put forth by the states included constituting a dispute settlement mechanism, forming a group of ministers and discussing options others than the two borrowing formula the Centre had proposed.

Indicating the Congress leadership’s mind, amid reports that Punjab and Kerala could move the apex court, Chidambaram said that he had “advised” some concerned persons “to wait for a few days to see how the Centre responds” to the three demands states have made before the next move.

“I was told a couple of hours ago, by a member who attended the GST council meeting yesterday, that states raised the issue of a dispute-settlement mechanism, setting up a group of ministers and looking at options other than the two the government had given.

But, without answering any of the questions, the finance minister, I am told, abruptly ended the meeting, rose and left. She didn’t answer the demands raised by the states,” Chidambaram said.

“The FM indeed chairs the meeting, but she is obliged to wind up the meeting only after everybody is satisfied that the meeting has discussed everything that deserved to be discussed. You can’t abruptly end the meeting and walk away. I was astonished. Yes, the GST council is divided (on the issue) but, debate and reach a consensus,” Chidambaram said.

At GST council meetings, Sitharaman’s predecessor Arun Jaitley, and at the empowered committee of finance ministers, prior to it, Yashwant Sinha and himself had practised consensus-building by accommodating all suggestions, he said.

Chidambaram termed the stimulus package announced by the FM was “no stimulus package to push economic growth” but “another sly attempt to dazzle” the people with exaggerated numbers. “It is also a candid confession that the earlier so-called “`20 lakh crore package” was a massive failure.

“It was a failure because it was a hoax…The numbers claimed this time too are a hoax. The stimulus is not of a value of `73,000 crore. Nor is it of the value of Rs 1,00,000 crore, another number that has been thrown at us. The fiscal impact of these announcements is estimated by analysts to be a mere 0.1% of GDP.”

“The most deserving people who need the money desperately have once again been left in the cold. They are the bottom half of the families in India. Government stubbornly refuses to make a cash transfer to their accounts.”

He said the Rs 10,000 crore interest-free festival advance to government servants was not additional expenditure as it would be recovered in 10 monthly instalments. It is like buying on equated monthly installments. The `12,000 crore offered to states, he added, was not a grant but a loan.

“All the big states put together will get `7,500 crore which is a minuscule fraction of the capital expenditure of `9,00,000 crore budgeted by the states for 2020-21. It will make little difference” Chidambaram said he was amazed by the use of the phrase “demand infusion” by the FM while announcing the stimulus package.

“She used the phrase demand infusion. I don’t know. I am not a trained economist like she is. I have understood liquidity infusion, I have understood money infusion. I can’t understand demand infusion. Maybe there is a phrase. Correct me if I am wrong.”

Source : Financial Express

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